PARIS — A group of American investors filed a lawsuit against Vivendi Universal and Jean-Marie Messier Thursday charging the conglom’s ousted ex-president swindled investors by playing down the group’s financial crisis.
The investors, who acquired Viv U stock shares between Feb. 11 and July 3, 2002, filed the suit in New York Federal Court. Damages sought were not specified.
The plaintiffs blame Messier for dragging the group into a buying frenzy that led to the accumulation of $19 million in debt.
“Messier orchestrated a plan aimed at dissimulating the gravity of Vivendi’s liquidity problems caused by its massive debts,” the complaint charges. “Several days before his dismissal by Vivendi’s board of directors, Ms. Messier had the group issue a number of press releases declaring Vivendi was not at immediate or serious risk of a shortage of funds that would menace the group’s future viability and require a discount sale of assets.”
Viv U could not be reached for comment.
Last week, the French stockmarket watchdog, the Commission des operations en Bourse (COB) began an investigation into Viv U’s financial dealings over the past year and a half.
Sources within the company predict the group will postpone the publication of its second quarter results, due July 26, until after the audit so as not to create a possibly discrepant financial picture.
Viv U hopes to shortly get a $2.5 billion loan, in addition to the $1 billion line of credit secured last week.
Financial analysts predict the loan will probably be based on Viv U’s intent to sell off a major asset, most probably Canal Plus. Sale of the paybox could bring in anywhere from $4 billion to $10 billion depending on how much cash can be immediately netted from a deal.
Ironically, in France, the Messier affair has suddenly become a case of deja-vu.
Jean-Claude Trichet, head of the French central bank and the man believed to be next in line to top the European Central Bank, was charged Wednesday with fraud, based on claims he falsified the accounts of the publicly owned French bank, Credit Lyonnais, during the early 1990s when he was at its helm.
Trichet – who’s name phonetically means “to cheat” – and other French officials allegedly downplayed the scope of the bank’s extensive and catastrophic investments, notably it’s ill-advised purchase of MGM from Kirk Kerkourian.
Credit Lyonnais, the country’s sixth largest bank, eventually had to be bailed out by the French government after incurring over $20 billion in losses.
Reuters contributed to this report.